Customs, Excise and Gold Tribunal - Tamil Nadu
Jana Jeevan Foods Pvt. Ltd. vs Addl. Commr. Of C. Ex. on 16 October, 1998
Equivalent citations: 1999(107)ELT388(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Original No. 41/89, dated 4-8-1989 passed by Additional Collector confirming the duty demand of Rs. 73,293.63 on the "Bambino Vermicellini Kheer" manufactured and cleared by appellants during the period 10-12-1986 to 1-4-1987 under sub-heading 2107.91 at 15% ad valorem in terms of Rule 9(2) read with Section 11A of Central Excises and Salt Act, 1944. He has also imposed penalty of Rs. 3,500/- under Rule 173Q of C.E. Rules, 1944. The Additional Collector has noted that the item manufactured by the assessee is an edible preparation not elsewhere specified or included falling under Chapter Heading 21.07 and put-up in unit containers ordinarily intended for sale attracting a rate of duty at 15% ad valorem under sub-heading 2107.91. In this regard, he has referred to Note 5(b) of Chapter 21 which reads as "Heading No. 21.07, inter alia includes 'preparations for use, either directly or after processing (such as cooking; dissolving or boiling in water, milk or other liquids), for human consumption." He has further proceeded to confirm the order on the ground that there is non-filing of classification list and taking of licence, hence there is suppression of facts and demands could be confirmed.
2. It was contended by appellants that Vermicelli mixture called as Kheer by them and marketed is only a preparation of vermicelli. The mixture of milk, powder and cashew nut etc., in the vermicelli is only intended to facilitate consumer to use it readily without going for purchase of each item. They contended that preparations being only of vermicelli does not go to another chapter of the Tariff Act i.e. Chapter 21. The appellants' claim is for classification under Heading 19.02 which has a specific description of vermicelli. They state that vermicelli kheer is nothing except small bits of roasted vermicelli and mixed with sugar powder and milk powder, pieces of cashew nut, elaichi, raisins. They marketed this mixture as "Bambino Vermicellini Kheer". They contended that during the period 10-12-1986 to 28-2-1987, the said item was not dutiable and had been treated as exempted goods. They contend that they were holding a bona fide belief of item being non-dutiable in view of Chapter Heading 19.02 itself includes vermicelli whether or not prepared. They contend that Heading 21.07 refers to 'edible preparations not elsewhere specified or included' and sub-heading 2107.10 refers to Trasad or Prasadam' and sub-heading 2107.20 refers to 'Sterilised or pasteurised miltone' and sub-heading 2107.91 refers to items put-up in unit containers and ordinarily intended for sale. They contend that the item in question does not fall into this type of edible preparations referred to in the tariff headings.
3. We have heard both sides in the matter.
4. Learned Advocate Shri V.J. Sankaram for appellants strongly pleaded for classification of the item under Chapter Heading 19.02 as vermicelli whether or not prepared is specifically included in the said heading. He pointed out 'specific heading' excluded a generic heading. Chapter sub-heading 2107.90 is a generic item and does not fall under the said heading. He also referred to HSN notes under Chapter 1902 which refers to items "Pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such as Spaghetti, Macaroni, Noodles, Lasagne, Gnocchi, Ravioli, Cannelloni, Couscous whether or not prepared)". The HSN note indicates that the Pasta of this heading are unfermented products made from semolinas or flours of wheat, maize, rice, potatoes etc. it further states that the Pasts of this heading may be cooked or stuffed with meat, fish, cheese or other substances in any proportion or otherwise prepared (e.g. as prepared dishes containing other ingredients such as vegetables, sauce , meat). The HSN notes also refers to 'couscous' which is a heat-treated semolina which could be cooked or otherwise prepared (e.g. put up with meat, vegetables and other ingredients as the complete dish which bears the same name). Therefore, he submitted that HSN note supports his contention and negatives the findings given by the Additional Collector that edible preparations are excluded from Chapter Heading 19.02.
5. Learned SDR for Revenue supports the impugned order and contends that once the item undergoes roasting or cooking, it goes out of Chapter 19. He relied on the following judgments to support his contention :-
CCE v. Frozen Foods Pvt. Ltd. -1992 (59) E.L.T. 279 (T) CCE v. Nektar Fruit Products -1996 (88) E.L.T. 421 (T)
6. On careful consideration of the submissions, we notice that vermicelli whether or not prepared is specifically included in Chapter Heading 19.02 and sub-heading 1902.10 refers to those items which are put in unit containers and ordinarily intended for sale. The Heading 19.02 also refers to 'Pasta whether or not cooked or stuffed (with meat or other substance) or otherwise prepared, such as Spaghetti, Macaroni, Vermicelli, Noodles, whether or not prepared. The Additional Collector has proceeded to consider only Chapter Heading 21.07 which refers to 'edible preparations not elsewhere specified or included' and he has not dealt with specific Heading 19.02 which covers items which are not specific in nature but he has gone to classify under residuary entry under Heading 21.07 which refers to edible preparations, not elsewhere specified or included. In the present case, vermicelli prepared whether or not is specifically included under Chapter 1902 and therefore a specific heading cannot be excluded and a generic entry taken for the purpose of classification. We also notice that HSN notes under Chapter 19 indicates 'Pasta' in this heading. The explanatory notes states that the Pasta of this heading are unfermented product made from semolinas or flours of wheat, maize, rice, potatoes etc. and the Pasta may be cooked or stuffed with meat, fish, cheese or other substances in any proportion or otherwise prepared (e.g. as prepared dishes containing other ingredients such as vegetables, sauce, meat). It further states that cooking serves to soften the pasta without changing its basic original form. In the present case, appellants are merely mixing with sugar powder and milk powder and pieces of cashew nut, elaichi, raisins and marketed it as Bambino vermicelli kheer. Mere mixing of vermicelli kheer after being roasted and mixed with sugar and milk powder, pieces of cashew nut, elaichi, raisins does not ipso facto make it an edible preparation as it is still required to be cooked for being consumed. Chapter Heading 21.07 refers to edible preparations like prasad or prasadam or sterilised or pasteurised miltone which are readily consumable, while in the present case the vermicelli is only in a prepared form. Even vermicelli whether or not cooked or stuffed is also included in Chapter Heading 19.02. Therefore, the Additional Collector's finding that the item is required to be classified only under Chapter Heading 21.07 is not correct and requires to be set aside.
7. In the case of CCE v. frozen Foods Pvt. Ltd. reported in 1992 (59) E.L.T. 279 (T), the item involved was "Surge" which was held to be appropriable for classification under sub-heading 2107.91 and even in this case, the Chapter Note 5(a) was pressed into for classification under sub-heading 21.07 as Note 5(a) refers to protein concentrates and textured protein substances and it was found that the item is "Surje" consisting of whey proteins and casein peptides (37%), carrier and sweetening agents (62%) and flavoring and vitamins (1%) and having satisfied that Section 5(a) under Chapter Heading 21.07, the Tribunal upheld its classification under this heading. This citation referred to by learned SDR is clearly distinguishable from the facts of the present case. Hence, SDK's reliance of this citation is not applicable to this present case.
8. In the case of CCE v. Nektar Fruit Products, the item involved was Sweet Corn Cream Style wherein it was noticed from the process of manufacture that cereal is in grain form and it is pre-cooked or otherwise prepared and is not obtained only by swelling of cereal or cereal products, which type of product alone would be covered by the first clause of Heading 19.04. It was held that since the item involved pre-cooking and it is a preparation fit for use either directly or after processing such as cooking, dissolving or boiling in water, milk or other liquid for human consumption, it was considered to be appropriately classifiable under sub-heading 2107.91. While arriving at this conclusion, the Tribunal noted the Notes 5(b) & (c) of Chapter 21 which refers to preparations for use, either directly or after processing (such as cooking; dissolving or boiling in water, milk or other liquids), for human consumption and note (c) refers to preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption. We notice that there is no specific entry for the item in question under Heading 19.02 as in the case of vermicelli and therefore this judgment is also clearly distinguishable and more particularly in view of Notes 5(b) & (c) which calls for classification of Sweet Corn Cream Style which will only fall under Chapter 21 and therefore ratio of this judgment is not applicable to the present case. Hence learned SDK's reliance on these citations are not applicable to the facts of the present case.
9. We further notice that Chapter Heading 19.02 clearly includes vermicelli under this heading and therefore a bona fide belief did arise in the minds of appellants for not filing classification or declaration as during the said period. The item in question was said to be eligible for exemption under Notification No. 17/70-C.E., dated 1-3-1970. Therefore, their plea that there is no suppression in the matter calling for invocation of larger period is required to be accepted. In that view of the matter, the appeal succeeds both on merits and on time bar and hence appeal is allowed.